The IPO Dilemma: Unspoken Questions Every Promoter Faces

For most SME promoters, the idea of launching an IPO is both exciting and anxiety-inducing. You've built your business from scratch. You've navigated markets, crises, and competition. Now you're at the edge of something bigger — opening your company to the world. But there's a question that lingers quietly: Is this the right move?

In this chapter, we unpack that question — and the many hidden thoughts that come with it — to help you make an informed, grounded decision.

1. Will my company's compliance requirements significantly increase after IPO?

Yes, going public increases compliance — but not in a way that's unmanageable.

• You'll have more reporting requirements and audits.
• Every business decision will need documentation and justification.
• Governance must become sharper and cleaner.
• You'll need to actively monitor SEBI and exchange updates for regulatory changes, analyse their impact, and implement them on time.

But if your company is already well-run, this is a natural evolution — not a burden. With the right systems and expert support, compliance becomes part of your professional growth journey and helps build long-term investor confidence.

Increased compliance is actually a significant positive, as it can help small companies grow into larger, more successful businesses. It supports scaling and promotes sustainable growth.

2. Will I still be in control of my business after IPO?

Yes, you'll still be in charge — but more people will be watching how you steer.

As a promoter, your role as the decision-maker remains intact. You continue to run the business, make key calls, and drive execution. Public investors don't get involved in daily operations, especially in SMEs.

What changes is the level of accountability. Big decisions need to be backed by clear reasoning and shared publicly. Investors, analysts, and even the media may question direction or timing. Large shareholders can shape opinions — not by giving orders, but through their expectations and actions.

So, while control stays with you, you now operate with more visibility. That's not a bad thing — it often leads to better decisions, stronger discipline, and a company that's built to last.

3. Will I get the right valuation from IPO?

An IPO helps in price discovery. The market values your business. But this also means:

• Overpricing can lead to poor listing and long-term damage.
• Under-pricing can leave capital on the table.

Smart promoters strike a balance: Leave something for investors to gain, while raising enough to fund the company's next phase.

4. Will investors understand my business?

That depends on how well you communicate during and after the IPO.

• You must articulate your business model in simple, confident terms.
• Investors need clarity, not complexity — explain how you make money, where growth comes from, and what the next 3–5 years look like.
• Avoid the temptation to overpromise. Stick to what you can deliver.

It is important to remember that - IPO marketing is not storytelling — it's expectation-setting.

5. What do investors typically look for after a company goes public?

Once you're a listed company, investors aren't buying a story as we already read above — they're buying results.

• They want your business to grow, your margins to improve, and your strategy to deliver.
• If you meet or exceed expectations, they support you. If you fall short, they make noise — sometimes publicly.
• High-quality investors are long-term focused, but only if you're consistent.
• They're not involved in daily decisions, but they do shape perception through how they invest, exit, or comment.

Ultimately, investors are here to create wealth — not to become passive cheerleaders. Your ability to manage both performance and expectations will define how you're viewed in the market.

6. Will I lose my risk appetite after IPO?

Most promoters feel this shift — and it's natural.

• You'll become more cautious. There's now a spotlight on every move.
• Impulsive bets or high-risk expansions are harder to justify.
• Decisions are slower — but also more thought-through.

You don't lose ambition — but you gain a layer of responsibility.

7. What if things don't go well after IPO?

Markets are volatile. Even strong companies can underperform post-listing due to timing, sentiment, or for many other reasons.

• A weak listing isn't the end — it's a beginning.
• What matters is delivery over the next 4–6 quarters.
• Long-term trust builds with consistency, not one-day success.

You can't control the market — but you can control how your business performs. That's where focus must stay.

8. Can I still sell my stake later?

Yes - you can sell your stake at any time, provided you comply with applicable regulations. Be sure to consult your IPO advisor or reach out to us for guidance.

Keep in mind:

• Selling your shares post-listing is generally easier if your business is performing well. If it's not, finding buyers at your desired valuation can be challenging.
• Liquidity typically improves after listing — but only when there's strong investor interest.
• If the stock underperforms, even promoters may face difficulties in selling.
• A strong business attracts trading volume. A weak one struggles, regardless of being listed.

In short: Don't just focus on the IPO. Focus on building a company that thrives beyond the listing.

9. Is this the only way to grow?

Not at all. Read ‘ Ways to raise funds for business ' for more ideas or reach out to us for guidance.

• IPO is one path — not the only one.
• If your systems, culture, or strategy aren't ready, it's better to wait.
• Private capital, internal accruals, or strategic partnerships can support growth until IPO readiness improves.

IPO is not an escape or shortcut — it's a graduation. And like any graduation, it needs preparation.

10. What do I truly gain from my company's IPO?

If done right, a public listing can deliver:

• Wealth creation for founders and team members
• Brand recognition and improved customer trust
• Credibility with lenders, partners, and regulators
• Access to capital becomes easier not just during the IPO, but later too through follow-on offers, Qualified Institutional Placements, Offer for Sale and more.
• Liquidity for gradual exits or expansion
• Access to global capital in future rounds
• Stronger governance and structure , leading to sustainable growth
• Ability to attract high-quality independent directors who add strategic value and improve governance

It can transform your company's position in the ecosystem — from a growing business to an institution in the making.

11. What should I keep in mind for my company's IPO?

Here's a final checklist to ask yourself:

• Are your financials clean and compliant?
• Is your business model proven and sustainable?
• Do you have at least two years of strong performance?
• Is your leadership team ready to handle public scrutiny?
• Do you have a clear use for the funds being raised?
• Are your internal systems strong enough for listed-company compliance?
• Can you commit to long-term transparency and investor engagement?

If most of these are a “yes,” you're closer than you think.